KARACHI: US dollar has recorded an increase of 17 paisas against the Pakistani Rupee (PKR) on Thursday to end at PKR 227.12 in the interbank foreign exchange market.
A day earlier, the exchange rate ended at PKR 226.95 in the interbank foreign exchange market.
Currency experts said that the local currency was remained under pressure during the day due to mounting dollar demand for import and corporate payments.
READ MORE: Pakistani currency ends firmer to dollar amid falling import
It is worth mentioning that the central bank recently lifted the prior condition for opening the Letter of Credit (LC) by the banks for import proceeds.
The government previously imposed restrictions on opening of the LCs in order to control balance of payment and prevent outflow of the foreign currency.
Imports recorded 32 per cent decline to $5.16 billion in the month of December 2022 when compared with $7.58 billion in the same month of the last year, according to data released by Pakistan Bureau of Statistics (PBS).
READ MORE: PKR falls sharply against dollar to welcome New Year
Besides, sharp depletion in foreign exchange reserves and disruption in loan program under International Monetary Fund (IMF) also caused rupee devaluation.
Pakistan’s official foreign exchange reserves have fallen to an alarming level of $5.82 billion by week ended December 23, 2022 as compared with $6.116 billion a week ago i.e. December 16, 2022.
The present level of the official reserves have created default like situation as the country may unable to pay for foreign trade in coming days.
READ MORE: Rupee plunges by 27pc to dollar in year 2022
The import bill of the country for the month of November 2022 was recorded at $5.18 billion, according to Pakistan Bureau of Statistics (PBS).
This shows the official foreign exchange reserves of the country have capacity to provide import cover for only 1.2 months. The benchmark foreign exchange reserves of a central bank should be at a level to provide three months import cover.
READ MORE: Dollar rises to PKR 226.41 as demand jumps for import, corporate payments
The foreign exchange reserves held by the central bank witnessed a record high at $20.146 billion by week ended August 27, 2021. Since then the official reserves of the SBP dropped by $14.324 billion.
